Bonds being issued for funding infrustructure, says Muhith

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FE Report
Finance Minister AMA Muhith said Saturday the government wants to mobilise fund through issuing bonds for financing the country's infrastructure.
Mr Muhith was addressing as chief guest at budget evaluation meeting, organised by Bazlur Rahman Foundation, at Dhaka Reporters Unity with its chairman Khondkar Ibrahim Khaled in the chair.
"We want to rely on bonds to raise investment …," he said.
Mr. Muhith said that the tax reforms will take place within the next six months.
Mr Muhith admitted that the government has failed to improve power supply situation in its first year in power due to pervasive corruption.
The finance minister said the government has taken decision for power purchase for quick improvement of the situation.
"The concerned committee has failed to finalise a deal even after inviting tender for the fourth time. This has compelled us to go for quick rental powers."
He said two power plants each having 100-megawatt capacity will go into production by this year.
Mr Muhith said the industrial policy has the detailed guidelines on how to deal with the state-owned enterprises (SOEs) and other sick industries.
Defending duty reduction on powdered milk import, Mr Muhith said the government wants to ensure smooth supply of the essentials amid its price hike in the international market.
"Each tonne of powdered milk is now traded at US$ 4100 against $1700 previously. For this, we have reduced its import duty," Muhith added.
Addressing at the programme, civil aviation and tourism minister GM Quader said coal policy is a must to extract coal to produce power.
"We need coal policy immediately. It will help produce cheap power and attract investment in the country," GM Quader added.
Mr Quader also said: "We should not debate on whether we will buy power at high prices or not. Rather, we should debate on how speedily we can get power for investment and expansion of industries."
Former caretaker government adviser Mirza Azizul Islam said that providing subsidy is not always encouraging for the investment.
"Different studies show that political stability is more important than that of the incentives to boost investment," Mirza Aziz added.
Former central bank governor Farash Uddin said GDP growth forecast at 6.7 per cent is achievable.
"I don't see any reason why we will not be able to attain the 6.7 per cent GDP growth," Mr Farash Uddin added.
He said during 1980s the GDP growth rate was between 4.0 and 5.0 per cent. "During the political party-led regimes, it grew at 5.0 to 6.0 per cent. So we will achieve this year's goal."
Farash Uddin said that coal should be extracted through open pit mining system to ensure at least 70 per cent coal from Phulbari.
"We must ensure the proper rehabilitation of the people of this locality," he added.
Palli Karmo Sahayak Foundation managing director Kazi Kholiquzzaman criticised the government for keeping the provision of whitening undisclosed money in the budget.
Outgoing FBCCI president Annisul Huq said realisation of tax at source from the exporters might hurt the country's export trade.
Mr Annis said measures to raise VAT will create inflationary pressures.
"I see tax on premium is not a right decision and it is contrary to the tax principles."
General secretary of Bangladesh Economic Association Dr Toufic Ahmed Chowdhury said that budget has failed to detect the reasons behind the high cost of doing business in the country.
Mr Toufic said the government might expand the bond market as a source of fund to meet the budget deficit.
Moazzem Hossain, editor of the Financial Express (FE) said the size of the budget is not too big.
He said strengthening of monitoring and improvement of governance are required for better implementation of the budget.
Mr Moazzem stressed the need for striking a balance between fiscal and monetary policies to lessen the impact of inflationary pressure.
The FE Editor also said tax net should be widened to raise the tax-GDP ratio, which is even much below than landlocked country Nepal.
Selima Ahmed, a woman entrepreneur, criticised the government for poor allocation to the woman and children affairs ministry.
Former banker RM Devnath criticised imposition of tax on the savings certificates.
Agriculture Minister Matia Chowdhury, Rashed Khan Menon MP, former chairman of parliamentary standing committee on finance ministry Mushfiqur Rahman, professor of economics MM Akash, and others were present and spoke at the function.